Growth of the Luxury PHEV and Electric Car Leasing Market
With the onset of electrification, the petrol headed and luxury car connoisseurs of the UK have been quick to be disparaging about the next generation of cars – they are boring / they are slow / they lack the quality and refinement of the leading options currently available in the market.
One of the main reasons for this thinking was that the initial concepts for electric cars, which many manufacturers tried to pursue, seemed to be a reinvention of the motor vehicle. Many of us remember the Nissan Cube and other similar novel adaptions which were more befitting in the Back to the Future film than on our drives.
Even Hollywood tried to allure us into an electric future with cars like the Audi in I Robot, which seem so far-fetched and completely devoid of any familiar features which we are used to with our vehicles. There is a small tranche of customers who do enjoy the unique approach to modern vehicles but for mass-market appeal, the comfort of familiarity cannot be under-estimated. Indeed, the simplistic approach of a Tesla does prove that the focus of investment should perhaps be more on battery technology and car features, as opposed to design.
Luxury Brands For PHEV and Electric Car Leasing
Many manufacturers are now following suit with their luxury car options – the Porsche Taycan and Audi E-Tron GT are a true testament as to what is important moving forwards. Indeed, the Taycan has been a key vehicle in the Porsche arsenal during 2021, as the removal of the Tesla Model S has left this market segment completely empty.
Your traditional 911, McLaren and Lamborghini customers are now considering the electric alternatives which are available to them. The vehicles look no different to the petrol alternatives and indeed offer the performance and exhilaration you expect from a performance car; the era of performance electric cars has very much arrived.
Another quick win in the luxury segment has been with the PHEV; the combination of petrol/diesel combustion engines along with a small lithium-ion battery has enabled many manufacturers to quickly convert their already popular vehicles into something more eco-friendly. The Mercedes GLE, Porsche Cayenne and BMW X5 are available in the PHEV format and have actually provided to be more popular as PHEVs.
The Significant Changes to Benefit in Kind Tax – Why You Should Chose an Electric Car to Lease
One of the crucial reasons for the apparent popularity has been the benefit to company car drivers, in particular directors of high-performing and wealthy SMEs, who wish to operate a car in the most cost (and tax) effective way possible. Before the onset of electrification, many directors would turn away from company cars on the basis of the tax which they would be liable for; the more expensive and polluting a car is, the higher the rate of tax is.
For luxury and performance cars in petrol/diesel format, they are both costly and inefficient. This resulted in directors turning towards other methods to operate a company vehicle, such as car allowances or driving commercial vehicles (like pickup trucks). However, as part of the UK’s commitment to going electric (2030 is the current deadline date), the UK Government and HMRC made some very significant changes in that from April 2020 driving a purely electric vehicle, regardless of its cost, will incur zero company car tax i.e. a “free” company car.
Moving into April 2021, the BiK will only increase to 1% and subsequently 2% in 2022 onwards. For many directors, this means saving hundreds, if not thousands, of pounds per month on their personal tax if they wish to lease a luxury car via the business.
So can any business user lease an electric or PHEV via their company? Theoretically any business can lease a new car. However, this is not an automatic acceptance as some customers believe. For a company looking to lease a new car they will need at least one, if not two, years accounts filed at Companies House. Additionally, these accounts must demonstrate a financial performance which meets the requirements of the vehicle.
If you are looking at a Tesla Model S or Porsche Taycan, you will be paying £1000 a month and upwards; does your company have sufficient income to meets these obligations? As we know, the obligations of the lease fall to the company and if it does not pay this amount, the individual directors are not help responsible (unless a director’s guarantee is in place).
As a result, our finance companies will look very closely at a company wanting to lease a luxury car, electric or not, to ensure the right decision from a risk perspective is being made. For any companies looking into the best electric luxury car deals, just make sure the company accounts are up to date and viable, 3 months’ bank statement are available and make sure that the individual directors all have positive credit. Do not note that contact hire and leasing NOT for poor credit customers or companies.
In terms of the car shown, the BMW X5 ESTATE xDrive45e M Sport 5dr Auto [Tech/Pro Pk] [PHEV – Plug-In Hybrid Electric Vehicle), this is based on the following configuration:
- Metallic Paint – Phytonic Blue
- Perforated vernasca leather – Black/Black
- Aluminium tetragon interior trim
- Integral active steering
- Bowers & Wilkins diamond surround sound system
- Acoustic glazing
- Electric folding towbar
- Sky Lounge panoramic glass sunroof
- CraftedClarity glass application for interior elements
- Comfort Plus Pack – X5
- Driving Assistant Professional Pack -X5
- Travel and comfort system pack – X5
- Visibility pack with laser light – X5
As standard the car includes heated windscreen washer jets, brake energy regen, hill start assist, enhanced Bluetooth, wireless phone charging, attentiveness assist, front/rear park distance control, 20GB hard drive.
Live cockpit professional with 12.3” digital instrument panel and CID, e-Drive button, automatically dimming rear view mirror, DAB radio, body coloured externals, M Sport aesthetics, dynamic brake lights with LED tech, LED daytime running lights.
Multifunction steering wheel, ambient interior lighting, connected pack professional, expanded exterior mirror pack, 40/20/40 split folding seats, leather upholstery, adaptive LED headlights, cruise control, driver and front passenger seats, automatic air conditioning, technology pack with HUD and M Sport Pro Pack.
On the technical-side the company car and business car users can note the P11d for a standard car at £72,605.00 and CO2 at 27g/km.
The 2998CC 8 speed petrol engine is coupled with a 24kWh lithium-ion battery. This will produce 394ps, 0-62 times of 5.6 seconds and combined MPG of 200. Expect an electric range of around 50 miles on a full charge (weather and driving mode dependent).